The Business Case: Getting unstuck from the past

Friday

Apr 17, 2020 at 12:23 PM

A friend of mine has a successful blog and podcast called Stuck in the 80s.

As the name suggests, Stuck in the 80s pays tribute to the music and culture of the 1980s. It’s earned my friend some nice perks through the years, including an annual gig on a 1980s nostalgia cruise and opportunities to meet celebrities like Deborah Foreman and Martha Quinn.

As someone who went through his teens and early 20s during the 1980s, I’m a fan of that decade, too. While I’m working under quarantine, the television in my home office is usually tuned to the 1980s music channel. But there are some parts of the ‘80s, like my high school senior photo, that I would prefer to leave in the past.

I took this brief detour down memory lane to make the point that, to some degree, I think Pueblo’s economic development efforts have been stuck in the ‘80s.

That was a difficult time for our community, when the local economy was struggling to recover from a downturn in the steel making industry. Some of our civic leaders decided back then that Pueblo needed to have a dedicated source of funding to promote economic development.

Local voters agreed to set aside a half-cent of sales taxes levied in the city to pay for incentives to help businesses relocate or expand here. And the Pueblo Economic Development Corp. was established to oversee the program and make recommendations to the City Council about how the sales tax money should be spent.

Since then, in keeping with voters’ wishes, PEDCO has focused most of its efforts on businesses that bring “primary jobs” to the community. Primary jobs generally are defined as those involved in making products that are sold, for the most part, outside of Pueblo County.

In other words, manufacturing jobs.

Although I didn’t live here in the 1980s, I’m sure that economic development strategy made a lot of sense at the time. Pueblo’s civic identity was tied up in manufacturing. To a certain degree, it still is.

However, like my hairstyle, the world has changed a lot over the last 40 years. Our country’s economy has become more service oriented and less manufacturing oriented.

We could spend hours debating whether that’s a good thing or not. But it wouldn’t change reality.

So I think now would be a good time to closely examine how the sales taxes for economic development have been spent in the past ― and whether our strategy for using those funds needs to be fine tuned to be more effective in the future.

Last week, the City Council took the extraordinary step of redirecting a portion of that money, $5 million, to support businesses struggling financially as a result of the COVID-19 virus. I think it was a wise move in response to an extraordinary set of circumstances.

But it’s only a temporary move. If city residents want to make more long-lasting changes to the way the sales tax money can be used, an appropriate time to do that would be in a November 2021 referendum.

The program requires voter approval every five years to be renewed. The current five-year period ends next year. I think the program should be renewed, but with greater flexibility to reflect how business conditions have changed since the era of big hair and leg warmers.

To be clear, I’m not one of those people who think the economic development fund should be eliminated and the sales tax money redirected to other purposes. And I’m not one to criticize PEDCO, which I believe has done a good job of administering the program within the guidelines it was given.

The question now is: Are there ways to tweak those guidelines so the financial incentives could be effectively applied to a broader range of businesses?

I realize that any time governments get involved in providing incentives to private businesses, it’s a slippery slope. But the truth is, we’ve been on that slope since the program was established.

There’s a legitimate concern, particularly in the retail and restaurant industry, about using incentives to lure new businesses that would compete against those that already are here. But what if, for example, special incentives were available to businesses willing to relocate in economically struggling neighborhoods others avoid? Like a grocery store on the East Side, maybe?

It’s a complex puzzle. Then again, so was the Rubix Cube ― and some people managed to solve that.

Blake Fontenay is The Pueblo Chieftain’s opinion page editor. To suggest future column topics for The Business Case, contact him at bfontenay@chieftain.com

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